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Monday, August 13, 2012

Convergence Of Social, Freemium And Gambling Games Requires A New Set Of Analytics And Game Platform Design

Freemium, social and gambling style games are beginning to converge making it hard to recognize what is a free game, virtual currency transaction related game, real gambling game, etc. The games in many cases are exactly the same in terms of content and game play characteristics with possible slight differentiation in  monetization strategies and perhaps legal status. In many cases the consumers of these games may not even recognize the differences being oblivious to what is legal or not and no longer seeing the difference between virtual currencies and traditional currencies and virtual goods and physical goods.

This blurring of game distinctions and boundaries  makes for a very interesting  game analytic system or platform. Traditional game analytics are silo-ed.   They are traditionally crafted for each of the game and game platform and audiences. We talk about ARPU in certain areas, life time value of a player in another and coin in or deposits in another. 

A number of game developers, platform providers and game publishers are now involved in all of these business models and are trying to figure out how, or should be trying to figure out how and if players are moving across the various game boundaries. For instance, if a business acquires a player in a freemium game how do they encourage the player to cross over into playing a real gambling game. How do you convert a player acquired in a  gambling game  into a freemium game? Should you? Under what circumstances should an attempt be made to convert a player? How do cross over players monetize in both environments? Is it cheaper to acquire them in a freemium game and up sell them into a gambling game? What does ARPU mean in this new world? What is the lifetime value of a customer? What is the cost of acquisition? What game features are working to keep players in the larger game eco-system? 

With the current state of game analytics and game platforms I suspect that optimizing a player across platforms is very difficult and unfortunately absolutely necessary to optimize everything from marketing spend, product feature sets and optimization of revenue per player. The games themselves may not encourage awareness of the other game types and  single sign-in or ID's not cross referenced across platforms.

Overall, game convergence requires us to view a player in a completely different light. We need to view them holistically presuming that any player could cross over, certain players will be most likely do so. Certain players will monetize better in one environment and not so well in another. Can we extend the lifetime value of player much longer then we can in a single game silo? Can we leverage the social context of a Facebook game in a gambling environment without ever launching a Facebook gambling game?

Clearly, we are at a point where the notion of a game or gaming environment has drastically changed. The analytics for this environment clearly lag behind the evolution of player behavior and game content offerings. However, the game platforms themselves may not be properly taking advantage of the new game play normal. Organizations think in silo's and build systems and games around these silo's. In a very real way the consumers or players are ahead of the game platform providers leveraging  game content as they see fit.

I am sure analytics system's will catch-up and savvy product managers will realize the opportunity. In the meantime revenue is being left on the table, cost of player acquisition  is higher then it should be and overall lifetime value of a player is unclear. 

 Kevin Flood is the CEO of Gameinlane, Inc. Kevin writes  about online games and their impact and integration into iGaming and E-commerce environments. Kevin is a frequent speaker at online game events and conferences in Asia, Europe and the US. Kevin and his Gameinlane team are currently working with online gambling, social gaming and e-commerce companies integrating social gaming with online gaming operations and integrate game mechanics into e-commerce applications. 


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